During the last half of May, reports began to surface in several mainstream
publications that the Bush administration and the Defense Department are
formalizing plans to consolidate US military bases in Iraq. Further, that
these bases will be there for at least several more years, and perhaps
permanently. Surprise, surprise!

Long-time readers of this E-Letter will recall that I told you in late 2002,
before the war even started, that the driving force behind the invasion of
Iraq and the ouster of Saddam Hussein was the US desire to establish
permanent military bases in Iraq. This permanent force would be used to
promote peace in the region and continue the War On Terror.

While the military spokesmen who announced the latest base consolidation
plans were careful to assure the media that these new, larger, more
fortified military bases will “not be permanent,” they did admit that these
facilities will likely be in Iraq for several more years to come. According
to the latest reports, these new facilities are quietly referred to as
“enduring military bases.”

The question is, will these larger, enduring facilities and the US forces
they house, be used to topple other despotic nations in the region and
extend the War On Terror? Or will they merely be used to continue the fight
against the insurgents in Iraq? The ultimate question is, has President
Bush lost his conviction to continue the War On Terror aggressively?

Looking Back On What I Wrote

In my
December 17, 2002 E-LetterI shared with you what my best
military sources were citing as the real reasons why we were going to war in
Iraq. At the time, the media were screaming that a war in Iraq would only
be to award Bush’s cronies at Halliburton and his pals in Big Oil the
enormous energy reserves in Iraq. You may recall that I told you
differently. Here’s what I said:

“I read so many articles and analyses which suggest that the only reason the
United States will wage war in Iraq is so that President Bush and his
cronies in ‘Big Oil’ can control Iraq’s vast petroleum reserves. I have not
believed this from the beginning, and I still don’t. There are others who
contend that the only reason the Bush administration has continued to
saber-rattle over Iraq was to insure a Republican victory in the mid-term
elections and regain control of the Senate. I didn’t believe that one
either. I believe that what is driving the war on Iraq is something very
different.

In a nutshell, the US will not back down from a war on Iraq because of the
message it would send to al Qaeda and terrorists around the world. After
eight years of Bill Clinton, the terrorists believe the US is fundamentally
weak and will not resort to war. Should Bush back down, this would
send a message that could accelerate terrorist attacks on America.

Secondly, should the US defeat Saddam Hussein and occupy Iraq, we would be
in a position, as never before, to reshape the Middle East and combat al
Qaeda. Some of my sources believe that the Bush administration has made a
decision to occupy Iraq with a permanent military presence to fight
terrorism across the Middle East.

Clearly, there are risks associated with a war on Iraq. American lives will
be lost. But whether we agree or disagree, it appears the Bush
administration will attack Iraq, eliminate Saddam Hussein and establish a
powerful US military presence in the region for years to come.”

“How things go in Iraq over the next few months could well decide who is the
next president of the United States. The war has not gone well recently, in
particular the latest firestorm over prison abuses. Bush’s approval ratings
have fallen to new lows. The President has two major problems with the war
in Iraq, and it remains to be seen how he will deal with them.

The first problem is that the war in Iraq has been mismanaged. Everyone
knows it, including the Bush administration, yet they steadfastly refuse to
admit it. The question is, how badly has it been mismanaged? It remains
to be seen if the administration can turn things around and what will happen
if Iraqi sovereignty is actually turned over at the end of June.

The other problem, perhaps just as serious, is that the Bush administration
has refused to tell the American people why we are really in Iraq in the
first place. My best sources believe that the plan from the very beginning
was to oust Saddam Hussein and install a permanent military presence in
Iraq that would be used both to stabilize the region and advance the War
On Terror. Yet for political reasons, apparently, the Bush administration
feels it dare not reveal this policy publicly…

Let’s think back to what we were told in the weeks leading up to the war in
Iraq. We were given three primary reasons for invading Iraq: 1) Saddam had
weapons of mass destruction; 2) Iraq was aiding and abetting terrorists, al
Qaeda specifically; and 3) Saddam posed a threat (nuclear or otherwise) to
America directly. This, we were told, was the justification for sending
130,000 US troops into Iraq.

The liberal media, of course, had a different spin on why we went to war in
Iraq. The two primary arguments from the media were that Bush decided to
attack Iraq either to seize control of its oil or to finish the job of Bush
Sr. in Desert Storm, or both. You will remember the headline: ‘
Blood For Oil.’ The media claimed that Bush was using US
troops to seize Iraq and the oil for Halliburton and his cronies in the oil
business. Didn’t happen. Others claimed Bush took us to war only to avenge
Saddam’s assassination attempt on his father in Kuwait.”

Stratfor.com Had A Very Different Analysis As Compared To The Media

As I told you last year, one of my very best geopolitical sources had a very
different view of how and why President Bush decided to take us to war in
Iraq. Here’s what I also said in
May 2004:

“From the beginning, Stratfor had a very different take on why we went to
war in Iraq. In February and March of 2003, Stratfor laid out the following
analysis for why we were going to war in Iraq:

‘The primary purpose of the Iraq campaign will, of course, be to
influence and reshape the region. Al Qaeda has support throughout the Middle
East, and most governments are either complicit or unwilling to incur the
political costs of disrupting al Qaeda and similar [terrorist] groups at
home. The purpose of this campaign is, first and foremost, to create a
politico-military environment that persuades countries in the region to
redefine their behavior. To put it more brutally and honestly, it is to
bring massive military forces to bear on countries in the region in order to
compel them to cooperate, or failing that, carry out future military
confrontations.

There will be two dimensions to this. The first will
be to redefine the atmosphere of the Middle East. Washington now accepts as
a given that it bears the deep animosity of the region. Officials do not see
any opportunity for a short-term solution to this problem, and the problem
presented by al Qaeda is immediate. If the United States cannot be loved,
the second best outcome is to be feared. A victory in Iraq would demonstrate
both American will and power. If it can be coupled with a successful and
relatively prosperous occupation, fear can be coupled with respect.

The second dimension is politico-military. Following the war, the United
States not only would be an occupying power but also would field a force
that is in effect indigenous to the region, at least from a military point
of view. The presence of a massive, mobile force, permanently based in
the region, without depending on the permission of others, would redefine
the region dramatically.The United States expects to be able to use that
force to its ends. [Emphasis added, GH.]

From the U.S. point of view, three countries are particular
post-campaign targets: Syria, Saudi Arabia and Iran… Once Iraq is occupied,
U.S. forces will have two missions. The first will be the occupation,
pacification and reconstruction of Iraq. The second will be to pose a direct
military threat to these countries. The United States certainly has no
intention or desire to invade any of these countries. At the same time, the
United States takes the view that it is only the threat of direct military
action that will compel them to cooperate in destroying al Qaeda. A threat
has no meaning if it is not serious. Therefore, in order to be effective,
the United States will have to be prepared to carry out follow-on campaigns…

For the United States, fighting and winning a war against Iraq has
become a strategic imperative. Although it is true that this war could
engender greater support for al Qaeda among the Islamic masses, the
consequences of not attacking Baghdad -- from Washington's perspective --
could be worse. But even more important, a victory and U.S. occupation of a
conquered Iraq would reshape the political dynamic in the Middle East. The
United States would be in a position to manipulate the region on an
unprecedented scale.’

Stratfor and its high placed sources believed from the beginning that the
plan was to invade Iraq with overwhelming force, oust Saddam Hussein and
install a permanent US force on the various Iraqi military bases seized in
the conflict. The war effort would result in the capture and control of the
most strategic country in the region, and the US military presence would
then be used, either directly or indirectly, to influence other countries in
the region to oust al Qaeda and other terrorist groups.”

Four Large New Military Bases In Iraq

The Washington Post was the first to run the story of the planned large, new
– and probably permanent – US military bases in Iraq on Sunday, May 19.
The story was confirmed by top-level military officers in Iraq the following
day. The report said the Defense Department plans to consolidate the more
than 100 bases where US personnel are now stationed in Iraq into four huge,
new, more permanent bases. The Post and others reported that these four new
bases will be located in the north, south, west and center of Iraq.

The Washington Post reported that the military spokesmen who announced the
base consolidation plans in Iraq were careful to assure the media that these
bases will not be permanent. The article quoted one military
spokesman as saying the new plans are "part of a withdrawal expected
to occur in phases, with Iraqi forces gradually taking over many of the
bases inhabited by US and other foreign troops."

However, a week after the initial article in the Post appeared, US military
commanders in briefings in Washington and Baghdad, and in media interviews,
said that growth of the insurgency has convinced them that the US will be in
Iraq for “many more years to come.” The
commanders are particularly concerned that the pace at which Iraqi police,
in particular, are being prepared to take over their own country’s defense
is not going anywhere near as fast as the US would like.

Was The War In Iraq Worth It? I Think So.

Public opinion on the war in Iraq has been very divided from the beginning,
and for some understandable reasons. As I argued in my May 18 E-Letter last
year, if Bush was unwilling to share with the American people what was
really driving the war in Iraq – a permanent US military presence in the
Middle East and a continuation of the War On Terror – then he would be
subject to widespread criticism, unless the war went spectacularly well. It
didn’t.

It has been clear for well over a year now that the Bush administration and
the Defense Department did not adequately plan for the bloody insurgency
that followed the initial success in toppling Saddam Hussein’s regime.
This is, of course, very regrettable.

But was the war in Iraq a major policy mistake? I would say NO.
We freed Iraq of a brutal dictator; over eight million Iraqis voted in the
election; and a new democratic government is in place. So, there is no
question in my mind that the war was worth it.

But the question remains whether President Bush and his advisors are still
intent on following through on the initial mission.As I
discussed in 2002 and 2004, the initial mission was to establish a permanent
military force in the Middle East to continue the War On Terror. But is
that still the policy?

There is no doubt in my mind that President Bush’s intentions when he
decided to invade Iraq were honorable. In the wake of 9/11, Bush had a
mandate to pursue the War On Terror, whenever and wherever. Arguably, Iraq
may or may not have been the best next target after Afghanistan, but as
discussed above it was strategically the best choice. The media, of course,
has vilified Bush over Iraq from the very beginning. No surprise there.

Yet here is the point, at least in my opinion: If we invaded Iraq to
establish permanent bases there to continue the War On Terror, and attack
terrorist camps in other countries in the region, then the Bush
administration should continue those plans. We have to hope that pressure
from the media has not caused Bush to scrap such strategic plans for the War
On Terror. Hopefully, the latest revelations about new military
bases in Iraq are an indication that the plans are still ongoing.

Finally, you have no doubt noticed that the media incessantly refers to the
American military presence in Iraq as an “occupation.”
Let us not forget that the US has military bases and installations in many
countries around the world. Are we occupying Germany just because we have
military facilities there? Of course not! But if the US goes ahead with
plans to build “enduring bases” in Iraq, the media will scream that we are
continuing to occupy Iraq.

Conclusions

The latest revelations that the US is planning permanent military bases in
Iraq should not surprise any long-time readers of this E-Letter. I told you
that was the plan in late 2002 before we ever invaded Iraq. And I
elaborated on that point again in May 2004.

I agreed with the plans to topple Saddam Hussein and establish permanent US
military bases in Iraq to expand the War On Terror. I still do, although
some readers will disagree, justifiably so. The Bush administration and the
Pentagon did a terrible job in planning for the insurgency that followed the
initial phase of the war.

But at the end of the day, has President Bush lost his will to use permanent
military bases in Iraq to continue the War On Terror? Will we not continue
the mission and go into Syria, the source of much of the insurgency in Iraq
that has taken the lives of over 1,700 US service men and women? Will we
not use our gains in Iraq to pursue a major political change in Iran? And
Saudi Arabia?

I hope not, and the latest news about permanent bases in Iraq is a good
sign.

Actually it is too early to know what the long-term plans are. The Bush
administration and the Defense Department cannot execute any follow-on plans
in the region until they stabilize the situation in Iraq. We are clearly
bogged down in Iraq, and even the best laid plans before the war could not
have anticipated the commitment of the insurgency.

As suggested in the first link in SPECIAL ARTICLES below, there are reasons
to believe that the latest wave of suicide bombings in Iraq is a signal of
the beginning of the end.At this point, there is little doubt
that the insurgency knows it is fighting a losing battle and is running out
of ammunition and volunteers.

Is There A Silver Lining In Iraq?

As I wrote in my
March 1, 2005 E-Letter, I believe there is a silver lining. And there
are new signs of this. This Friday, national elections will be held in
Iran. Not real free elections, of course, but elections where some people
can vote for a change. Just today, I read that there have been huge
public protests in Iran this week by WOMEN. In Iran, women are
not allowed opinions, or the right to vote, much less the right to publicly
protest. But protest they did this week. Yet according to the reports,
these women were not arrested or killed for their public demonstrations.

Follow me here… We can all agree or disagree with the war in Afghanistan and
the war in Iraq. We can all agree or disagree that major mistakes have been
made by the Bush administration. There are good arguments for both sides.

But we all must absolutely agree that women would not be demonstrating
for equal rights in Iran this week – without punishment or killing - had
they not seen what the US did for human rights in Afghanistan and Iraq.

President Bush has his faults, plenty of them. The US has made plenty of
mistakes, and we will continue to. But Bush is right – freedom is
contagious, despite our mistakes. As I wrote in my
March 1 E-Letter earlier this year, the Freedom Genie is finally out of
the bottle in the Middle East and in other parts of the world. This is good!

Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.